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1Reconnecting People and the State: Elements of a New Social Contract

1. Reconnecting People and the State: Elements of a New Social ContractSeán Healy and Eamon Murphy

Introduction

T.K. Whitaker once noted that “there are values, moral and intellectual, which are higher than just mere economics. But it makes for a happier and more contented society if everybody has some basic share in wealth and well-being.” (Chambers , 2015).

As Ireland enters its second century of independence, it is clear that not only does the society envisaged by the man voted greatest Irish person of the 20th century not exist, but the country has no coherent pathway to get there.

Among the major social and political issues dominating people’s attention as we write this paper are the housing and homelessness crisis; the tracker mortgage scandal; and the surrounding debate about banks and corporations, and their accountability to Government and to the citizens of this country. These are issues of crucial political importance that people feel they have little or no say over. It is in this context that the topic of engaging the Citizen with the State becomes more important.

It is not only in these areas that Irish society is faltering. Most recent available figures suggest that almost one in six people, or 790,000 Irish people, are at risk of poverty. More shockingly, in excess of one in four (or about 1.2 million) are experiencing deprivation. Almost a third of those at risk of poverty (roughly a quarter of a million people) are children (CSO, 2017).

There are now more than 91,000 households – that’s households, not people – waiting on local authority housing. Entire families are living in hotel rooms, and Ireland’s homelessness numbers are at an all-time high,

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with a 27 per cent increase in homeless families in the last year, and over 3,000 homeless children (Department of Housing, 2017).

Our commitment to our climate targets2 has been less than distinguished (Environmental Protection Agency, 2016), and if current emissions projections are met, Ireland will likely be fined hundreds of millions of Euros.

All of this serves as evidence that Ireland’s social contract is broken. As in many countries, Government’s response to the financial crisis has undermined confidence in the fairness and legitimacy of the way we have structured our society. Regressive budgets have increased the gap between the better-off and the least well-off in society. Banks and bondholders have been bailed out, while ordinary citizens lost their jobs or their homes.

It must also be acknowledged that the recovery Ireland is experiencing is not being experienced by all equally. Ireland 2040, our current National Planning Framework, is an opportunity to build the society that all citizens and residents of this country desire. It is an opportunity to build a new consensus on what our society should look like, what type of economy should support it, and how we are going to deliver and fund the services that will provide a decent standard of living for all.

This is particularly important in the current political context. We are in the midst of a global shift in political ideas. Across Western Europe and the United States, there has been a rise in populist politicians and political parties offering often xenophobic and isolationist visions for their countries that seek to dismantle some of the important social gains that western society has made in the last century. This has been driven in large part by disillusionment among electorates, with many feeling socially or economically isolated, and therefore willing to take a chance on something new and unknown, albeit potentially socially dangerous. To counteract this, there needs to be a progressive alternative put forward to ensure that Ireland does not go down the same path.

In this regard, as we write this, we stand at a particularly opportune moment. In the first months of a Government led by a new Taoiseach, and with a new cabinet in place, there is potential to move in a new direction in

2 See EU Effort Sharing Decision No 406/2009/EU for 2013-2020 (European Union, 2009)


many respects, but particularly with regard to engaging people in their role as citizens. Can the “New Politics” deliver a different relationship between Citizen and State? Political will is required to ensure this opportunity is not lost.

As part of its second century of political independence, Ireland needs a new social and economic model. Ireland also needs a new means of engagement between Citizen and State; Ireland needs a new Social Contract.

Elements of a New Social Contract

2016 saw wide commemoration of the centenary of events which kick-started the journey to Irish independence. The beginning of a new century of Irish independence is an opportune time to re-think the structures upon which Irish society is built. It should be clear that the social contract on which Ireland is built is broken, and something new is needed. But what will that look like?

We argue that this new Social Contract should have as its aim the achievement of the common good. We understand the term ‘common good’ as “the sum of those conditions of social life by which individuals, families and groups can achieve their own fulfilment in a relatively thorough and ready way” (Gaudium et Spes, 1965:64).

This understanding recognises the fact that the person develops their potential in the context of society where the needs and rights of all members and groups are respected. The common good, therefore, depends on having the social systems, institutions and environments on which we all depend working in a manner that benefits all people (Healy and Reynolds, 2011).

In seeking to deliver the common good, a new Social Contract – relevant for the next few decades – must anticipate many developments, including future technological progress and the changing world of work; demographic changes; migration; and the need to care for the environment. But it must also tackle the problems Ireland currently faces; problems for which we have yet to provide a solution. It must have equality, fairness and social justice at its heart, and it must ensure that nobody is left behind.

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As part of the new Social Contract, Ireland as a society should aim to deliver public services and social infrastructure equivalent to those delivered by the similarly developed economies of Western Europe, i.e. the EU-15. Irish people expect these standards. These services and infrastructure would include properly funded and efficiently delivered universal healthcare for all age groups. They would include appropriate accommodation for all citizens, as well as a well-subsidised and properly functioning public transport network. They would also include an adequately funded education system; a system of social welfare which, while protecting society’s most vulnerable, is also fit for the 21st century; and a childcare infrastructure equivalent to those in other developed Western European countries.

It is only through the delivery of adequate services that the inequalities that prevail in Irish society can be overcome. We believe that most Irish citizens would aspire to living in the society we are proposing. A progressive Social Contract for Ireland’s second century of independence would rest on a number of pillars: economic, political, cultural, and social. All facets of these pillars should have sustainability at their heart. We now address each of these facets in turn.

Economic

Sufficient resources are required to ensure all can live life with dignity. It goes without saying that this is fundamental to a successful Social Contract. To achieve this, Ireland needs a vibrant economy that generates the resources required to build the society we desire, and generates sufficient employment for those who want it. Ireland also needs an economy that is not only well run, but is run in the interests of society. For the Social Contract to function, macroeconomic and financial stability are essential, as are: an equitable distribution of resources; sufficient levels of investment; and a fair system of taxation to fund it. The economic structures must be fair, and the institutions that form the backbone of the system must act justly.

Many of the facets of a well-run vibrant economy are interconnected. A vibrant economy requires sufficient levels of public investment. Despite a historically long period of low interest rates allied with low government bond yields, Ireland’s public investment as a percentage of national income


has declined dramatically since the late 2000s. Governments never really cut infrastructure investment; they merely postpone it. Doing so over a prolonged period creates an infrastructural deficit that can hinder the delivery of public services, depress domestic demand, and lower general living standards. The level of capital spending is a good illustration of whether Government really has a vision for the kind of country it wants to create, and Ireland’s level of public investment as a proportion of national income is well below the European average and in fact was the lowest in the entire European Union in 2015 (Eurostat, 2017).

While it is welcome that public investment is increasing3, it is increasing from an extremely low base, and further increases will be required in the coming years4. The lack of public investment in recent years is further evidence of a broken Social Contract. The effects of inadequate investment can be seen everywhere, from the current crisis in housing to the lack of an adequate rural broadband network to the lack of sufficient flood defences in towns and communities across the country. Earlier this year, the American Chamber of Commerce in Ireland published a report warning that Ireland’s current housing crisis is so severe that it could damage Ireland’s competitiveness (American Chamber of Commerce in Ireland, 2017). While there are certainly other, more socially worthy, reasons for investing in Ireland’s productive social and economic infrastructure, there is perhaps no clearer or more obvious example of the need for large-scale government investment to maintain Ireland’s medium-to-long-term growth potential, given the prevailing economic circumstances. Well-targeted social investment would create employment and also enhance growth, which would contribute to robust public finances, reducing unemployment and increasing tax returns.

The organisation and distribution of the available resources must be such as to ensure the required level and quality of services and infrastructure can be delivered. Our infrastructure deficit is a result of low public investment over a number of years. Under a properly functioning social contract, this must change. Without adequate social infrastructure and services, it is impossible to achieve the minimum standard of living to which all citizens,

3 In Budget 2018, total voted capital expenditure was increased by €790m (17 per cent) on the previous year, from €4.5bn to €5.3bn. Public investment is scheduled to increase from €3.7bn to €7.8bn over the period 2015 to 2021.

4 Increases are necessary not just to “catch up” on deficits that have developed due to postponed investment, but because Ireland’s changing demographics require it.

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from children to older people, aspire. This is particularly so in the context of an increased birth rate and a gradually ageing population. If demographic trends continue to be ignored by policymakers, Ireland will find itself in serious difficulty in a few short years, as great strain will be put on our social infrastructure including hospitals, schools and other services. Not enough is being done to prepare for the society that will emerge in Ireland in the coming years.

In order for the necessary infrastructure and services to be delivered, fair and sustainable taxation is essential to ensure sufficient resources are collected so that this desirable future can be created. Perhaps the greatest lesson of the 2000s was that our small open economy is prone to shocks that can cause large swathes of revenue to disappear very quickly. The narrowness of the Irish tax base resulted in almost 25 per cent of tax revenues disappearing in a very short space of time in the latter part of the decade, plunging the exchequer and the country into a series of fiscal policy crises. A sustainable revenue stream requires a broad and sustainable tax base. For the tax base to be sustainable, it must begin to move closer to the European average. The current trajectory of government policy is for reductions in total revenue (of which tax revenue is by far the largest component) as a percentage of national income5 and a corresponding reduction in expenditure (Department of Finance, 2017: 45). Such an approach will not provide the revenue that Ireland needs to increase expenditure in order to achieve the same level of public service and infrastructure provision as our European counterparts. It is simply not possible to provide the high-quality public services Irish people aspire to while failing to collect adequate revenue to pay for them. Allowing total expenditure to fall as a proportion of national income will only result in a further infrastructure deficit compared to our EU counterparts.

As part of a new Social Contract, it must be recognised that European-average levels of services and infrastructure cannot be delivered without close to European-average levels of taxation. Increasing the overall tax-take (from all sources) towards the European average would raise the additional revenue required, while still maintaining Ireland’s status as a low-tax country as defined by Eurostat. The tax-take must also be increased in such a way

5 We are well aware of the limitations of Ireland’s measurement of GDP. However, regardless of the measure of national income used, Ireland’s tax-take is well below the European average and will have to rise in order to meet the demands created by demographic changes.


that the burden falls on those most able to bear it. This will involve shifting taxation towards wealth and higher incomes, ensuring that those who benefit the most from Ireland’s economic system contribute the most.

Central to fairness in taxation is that all sectors of society contribute their fair share. The current system of corporation tax in Ireland allows for many large operators to pay a disproportionately low contribution, or avoid paying tax altogether. The European Commission’s decision on Apple’s tax arrangements has caused reputational damage, as have the contents of the recently released “Paradise Papers”, and Apple is not the only multinational corporation using the Irish tax regime to avoid taxes on their profits. A key medium-term priority must be the re-conceptualisation of the role of the Irish corporation tax regime. There has been a growing international focus on the way multi-national corporations (MNCs) manage their tax affairs. The OECD’s Base Erosion and Profits Shifting (BEPS) examination has established the manner and methods by which MNCs exploit international tax structures to minimise the tax they pay6. Similarly, the European Commission has undertaken a series of investigations into the tax management and tax minimisation practices of a number of large MNCs operating within the EU, including Ireland.

Ireland should change its stance towards the corporation tax debate in Europe, and take the lead in negotiating a Europe-wide minimum headline corporation tax rate of 17.5 per cent with a minimum effective rate of 10 per cent. Until that point, Ireland should implement a minimum effective rate of 6 per cent. Were such a rate in place in Ireland in 2017, corporate tax income would have been between €1bn and €2bn higher; a significant sum, given the socio-economic challenges being experienced and the need for resources with which to address them.

Aggressive tax planning by corporations relies on exploiting mismatches between the tax rules of individual countries. Such actions should not form any part of a progressive Social Contract. Corporations should contribute their fair share to the building of a society that works for all. However, many of these mismatches can be removed; leadership, cooperation, and political will are what are most required.

6 See www.oecd.org/ctp/beps.htm

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If a country is setting social and economic goals, it is important that taxation policy supports these goals. Tax justice must be a key building block of any future Social Contract. Economic structures must be fair if people are to accept the economic changes required to underpin a new Social Contract. If ever there was to be a catalyst to generating discussion on the justice underlying our taxation system, it should be the ‘Apple arrangement’.

The new Social Contract should also shift the lens through which we view the economy. Karl Marx believed that capitalist society tends to undermine its own foundations, to the point at which it will ultimately self-destruct (Fourcade and Healy, 2007). In many ways, the Social Contract is a protection against the failures of market economies. It should provide a level of social provision that ensures a minimum standard of living below which no citizen may fall. It should also mean that Government is the ultimate guarantor of the best interests of its citizens, guiding concepts of what constitutes fairness in prices, wages, competition, and trade (Healy and Reynolds, 2011: 145-146). After the crash of 2007/8, Governments and international bodies such as the International Monetary Fund, the European Central Bank and the European Commission made huge efforts and invested enormous resources in rescuing financial institutions which had gambled recklessly and lost. This was done unfairly (Kelpie, 2013), and at the expense of people who played no part in the market’s failure. There must be a removal of the implicit assurance of financial bailouts and Government must ensure the finance industry behaves in a socially responsible manner.

The activities of corporations often have big impacts on social, environmental and intergenerational justice. In their search for competitive advantage they may ignore the values and needs of local communities (Healy and Reynolds, 2011:171). The Council of Europe’s (2014) Charter on Shared Social Responsibilities encourages companies to adapt their forms of governance to incorporate the general principles of shared social responsibility, re-thinking their aims and operational principles in a context of social, environmental and intergenerational justice, bearing in mind all the costs and impacts of their activity. Corporations must acknowledge that as part of the Social Contract they benefit from Ireland’s social and economic infrastructure; most obviously roads and telecommunications, and Ireland’s highly educated labour force. They should therefore behave with the interests of society in mind, in line with the principles stated


above. It is time to ensure that the Irish economy is truly working in the interests of Irish society, and not the other way around.

Political

Decision-making structures, and democracy itself, are under threat as people have lost trust in, or are alienated from, a wide range of institutions and political systems. Proof of this is being seen in the United Kingdom (and the decision of the electorate to leave the European Union) and the United States (with the election of President Trump), as well as across Europe, as increasing numbers of citizens reject the status quo in favour of risky and unknown options.

These trends are a manifestation of a political and social discontentment that has, sadly, been directed to entirely the wrong place. They are the result of a combination of misconceptions of national identity, and failed social and economic policies. There is an element of desperation to it all; people have lost faith in politicians and institutions, and part of that desperation can be blamed on a failure of more progressive-minded politicians and parties to present a coherent and realistic vision for a viable alternative.

One startling statistic emerging from the U.S. Presidential election of 2016 is that the counties carried by President Trump contributed just 36 per cent of the country’s GDP in 2015, in comparison to 64 per cent from those voting for Hillary Clinton (Brookings, 2016). These numbers highlight very starkly the economic divide between supporters of the two candidates. Many of those who voted for Trump did so out of a sense of social or economic isolation, or a feeling that their voice was not being heard. It has also been noted that one of the ironies of Brexit is that many of the votes that helped push the referendum result over the line were from people who will now, to a great extent, find themselves in a worse position outside of the European Union. Perhaps feeling socially and economically neglected, some used their vote to protest against the political establishment. The resulting economic fallout and disappearance of European subsidies for economically depressed regions will now likely see them suffer further.

A great many decision-makers within politics and in other areas have no real clarity about the ‘good society’ or ‘just society’ worth working for. Meanwhile, Bauman (2011a) has written that social democracy has lost

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its own separate constituency – “its social fortresses and ramparts, the enclosures inhabited by people at the receiving end of political/economic actions, waiting/yearning to be recast or lift themselves from the collection of victims into an integrated collective subject of interests, political agenda and political agency all of its own. Such constituency has been all but pulverized into an aggregate of self-concerned and self-centred individuals, competing for jobs and promotions, with little if any awareness of the commonality of fate and even less inclination to close ranks and demand solidary action”.

Today, in many countries, the political agenda is set from a neo-liberal perspective, with priority given, first and foremost, to economic issues. The ongoing failure to address the housing and homelessness crises is a good illustration of this in practice, with Government repeatedly turning to market-based solutions, rather than direct intervention.

The problems, however, run even deeper than this. Political institutions at local, regional, and national level are ineffective in coping with the challenges that emerge with the current breakdown in the relationship between power (by which we mean the ability to do things) and politics (by which we mean the ability to decide in which directions power should be used). Many of those who benefit from current political/power arrangements have no great reason to care about local people in the areas in which they operate and have even less reason to invest in building a better future for these people.

With this in mind, the EU needs to rebalance its policy focus and give far greater prominence to social priorities, which were neglected during the 2008-13 financial crisis. That crash, combined with longer-term economic developments linked to globalisation, made employment more precarious and reduced social protection and services. The failure to address key aspects of social policy has resulted in many people moving towards Eurosceptic populist movements and demanding stronger national borders.

For more than a decade, organisations such as the International Monetary Fund, OECD, International Labour Organisation and even the World Economic Forum have issued stern warnings that the global trend of increased inequality will harm growth, social cohesion and the business community. But little to no action has been taken. As noted by Bosch (2017),


for a long time, many have restrained their criticism of the European Union and its free market policies for fear of being considered anti-European or outright xenophobic. However, the lack of open debate of these policies proved a huge mistake, as right-wing populists stepped in to fill the gap. If the European project reasserted its credibility by strengthening its social foundations, then EU critics would have no basis for their arguments. This is where the need for a coherent vision for a better society is needed most.

The President of the European Commission has proposed five alternative visions of the EU’s future. Incredible as it may seem, the ten criteria applied to each doesn’t contain a single reference to social policy. More and more, the EU has become an economic project driven by an elite which has failed to address issues of poverty, deprivation and social exclusion, as well as others related to health, education and taxation.

The debate on the future shape of the EU must not be overshadowed in Ireland by our preoccupation with (a most important) Brexit process.

A real partnership approach to decision-making is required to address the current impasse. However, such a partnership becomes increasingly difficult as the current democratic deficit grows and becomes commonplace. The roots of the malaise lie in the breakdown in communication between the holders of political office and the people. The economic crisis of 2008-2013 has been largely responsible for laying bare the political crisis of Europe. Trust in the capacity of the state to solve such crises once rested on the supposition that both conditions of effective management of social realities – i.e. power and politics – rested in the hands of the state; the sovereign master within its own territorial boundaries. However, in Europe, the state has been losing a large and growing part of its past genuine or imputed power. The present crisis differs from its historical precedents in as far as it has come about in a situation of a divorce between power and politics (Bauman, 2013). Politicians may well make decisions or wish for particular outcomes but their capacity to deliver is limited by the fact that much of the power now rests with globalised entities; entities which in many cases have little or no interest in promoting a fairer future or delivering well-being for all.

An alternative option for the future of the EU should also ensure that the European Commission protects small countries against their larger, stronger

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members. It was this way once, back when Ireland joined the European Economic Community. But that situation has changed over the years; it needs to be reversed again, back to its original form. Otherwise, the reality of growing alienation from decision-making processes and structures will continue and the Union itself will be at risk.

Engagement of all sectors of society in decision-making processes is essential for the type of real partnership that is required. Rights and responsibilities are two sides of the same coin in a cohesive society. If an individual has a right, then that implies a responsibility on the part of some other person, group or institution to (i) allow the freedom to exercise that right, (ii) provide the mechanism to protect that right, and/or (iii) make positive provision so that right can be realised (Ife, 2004). This implies a similar responsibility on the individual to make similar provision for others in the same society, that the rights of all might be vindicated.

Rights come with responsibilities for all citizens, and we all have a shared responsibility in shaping our collective future, and sharing in the outcomes produced7. As far back as Plato it was recognised that the person grows and develops in the context of society. “Society originates because the individual is not self-sufficient, but has many needs which he can’t supply himself”8. This shared responsibility covers all spheres of life: economic, political, social, cultural, and environmental. This is the basis of any progressive social contract.

As part of this social contract arrangement in a modern democratic society, citizens may expect participation in civic life and in shaping the decisions that affect them. For a Social Contract to be legitimate, it must embody the will of the people. One of the key things underpinning a viable Social Contract is that there must be engagement with citizens, on an ongoing basis, on where society is moving. Citizens have a right to be involved in the shaping of decisions concerning the future of their society, and there should be recognition of the full range of stakeholders and the implementation of a process for deliberative discussion. A deliberative decision-making process is one where all stakeholders are involved but the power differentials are removed (Healy and Reynolds, 2011).

7 For more on this, see Sharing Responsibility for Shaping the Future – How and Why? (Healy and Reynolds, 2011)

8 Plato, in Lee 1987, p58, cited in George, V. 2010, p6


Elster (1998) claims that a deliberative approach would produce better outcomes for four reasons:

1. The emphasis placed on open dialogue may unlock untapped knowledge about the strengths and weaknesses of existing methods of doing things.

2. Those involved in the policy-making process have the opportunity to acquire new skills and greater know-how about particular policy methods.

3. The promotion of collaborative and joint action may induce a richer mode of decision making, by encouraging participants to justify the positions they adopt with high quality reasoning. More informed better thought-out decisions not only foster shared understandings between the different participants, but also deepen the wider legitimacy of policies.

4. The encouragement of consensus building and trust-enhancing modes of interaction may atrophy the boundaries between the different constituencies that are involved in a policy network. New relationships of interdependence may emerge that strengthen the collaborative ethos of the process.

The question for Ireland, in drawing up a new Social Contract, is how are we to deliver each of the desired outcomes, and more, in the 21st century? There is a need to reconfigure the Social Contract to encourage participation and collective responsibility; an acknowledgement that at different points in the lifecycle each of us will be a key contributor or a key beneficiary, or both. We must ask ourselves: what type of social contract will encourage collective responsibility and joint-ownership, reimagining the relationship between citizens, the community, the state, and the environment?

Cultural

A new social contract must have social justice at its core and must be focused on building a just society. Amartya Sen is blunt in his examination of what happened following the 2008 economic crash. He points out that it was the poorest people, people ‘at the bottom of the pyramid’ that were

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most impacted on. “Families who were already worst placed to face any further adversity have often suffered from still greater deprivation, in the form of lasting joblessness, loss of housing and shelter, loss of medical care, and other deprivations that have claimed the lives of hundreds of millions of people.” Sen is correct when he states that examining the severity of the current global crisis requires that we examine ”what is happening to the lives of human beings, especially the less privileged people - the well-being and the freedom to lead decent human lives” (Sen, 2014).

Zygmunt Bauman (2011b) has proposed that a ‘just society’ “is a society permanently sensitive and vigilant to all cases of injustice and undertaking to take action to rectify them without waiting for the search of the universal model of justice to be completed. In somewhat different and perhaps simpler terms a society up in arms to promote the well-being of the underdog; the well-being including in this case the capacity of making real the formal human right to decent life; freedom ‘de jure’ into freedom ‘de facto’”.

The debate on whether certain rights are universal (United Nations, 1948) or are culturally relative (Ignatieff, 2001) is an important one. Each civilisation, through its own history and cultural norms, holds certain rights to be self-evident in their society, and these will differ from country to country. However, we believe that every person has seven core rights, whose vindication are essential to the development of a just society and which should be part of any future Social Contract. We also believe that these rights are so fundamental to the experience of Irish citizens and their expectations of what our well-off democracy should provide that there will be almost universal agreement on these rights among Irish people.

These core rights are:

• the right to sufficient income to live life with dignity; • the right to meaningful work; • the right to appropriate accommodation; • the right to relevant education; • the right to essential healthcare; • the right to real participation • and the right to cultural respect.


The achievement of each of these rights should form the basis of a new Social Contract. As well as this, equality must be a central component of any new social contract. Income inequality, gender inequality, and inequality of opportunity are problems in Irish society. They produce a range of negative outcomes for those who are poor and/or excluded. Wilkinson and Pickett (2009) have pointed to the negative consequences of inequality for all sections of society; their evidence shows that more equal societies produce better outcomes in everything from subjective well-being to lower crime rates. A new Social Contract for our society must reverse the effects of many of Ireland’s post-crash policies which served only to exacerbate already existing inequalities.

Inequality has been at the heart of much of the upheaval faced by the world in the last few years. Some of this has been caused by economic changes that were either inevitable or the downside of desirable developments; technological progress cannot be arrested, nor can the improving competitiveness of emerging economies of the Global South. But failure to ensure the gains from these trends are more widely shared has led to political and social upheaval in other countries and a new Social Contract would require action be taken to avoid similar outcomes here.

The economy cannot be treated in isolation. A thriving economy is not an end in itself; what counts is what the fruits of that economy are used for. Certainly, great disparities in wealth and power divide society, weakening the bonds between people and undermining social solidarity. But they are also bad for the economy, as a greater proportion of income and wealth concentrated in the lower income groups of society would result in a more powerful economic multiplier. A lot of the present political instability and social unrest is as a result of inequalities in society. Ireland is not immune to this. As noted earlier, most recent available figures suggest that almost 17 per cent of the population are at risk of poverty. Almost a third of those at risk of poverty (roughly a quarter of a million) are children.

In addition, the Irish labour market has developed in such a way that even a job is no longer a guaranteed way out of poverty. Approximately one in eight of those in poverty and one in four of those experiencing deprivation are in employment. That corresponds to about 100,000 people who are experiencing poverty and 300,000 people who are experiencing deprivation who actually have a job. This is a particularly distressing trend, given the

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growing instance of low-paid employment in Ireland. These trends, and the record levels of homelessness being experienced in Ireland as noted already, are situations that simply cannot be allowed to persist in a well-off society like Ireland and are further evidence of a broken Social Contract.

Social

The emergence of the ‘precariat’ has seen a fundamental change in the relationships within society and between labour and capital. We have referred already to the precarious nature of employment for many people and how this reality has been growing over the past decade. This creates a situation of uncertainty, impotence and what Bauman calls an “inexhaustible source of humiliation”. (Bauman, 2011c). This situation is dividing and separating people from each other and undermining attempts at solidarity in addressing the changing reality.

At the core of this new reality of precariousness lies the fact that, for the first time in history, those with power and resources can move their wealth to other parts of the world where there are a great many people ready, without complaint, to suffer any kind of employment regime no matter how poorly paid, no matter how terrible their working conditions. When this was not the case in the past, both sides had an interdependent interest in negotiating solutions to their disagreements and finding ways of getting along. Failure to find such solutions would lead to mutual destruction, so there was a ‘natural’ emphasis on finding mutually-agreeable solutions to disputes and both sides had an interest in ensuring the other side continued their engagement.

This, in practice, meant that there were built-in limits to inequality and social exclusion. The welfare state emerged as, among other things, a process for ensuring that labour was always in a good position to take up employment. The excesses of capitalism were also controlled as the need for minimum wages and limits to the hours one had to spend on the job were agreed either by consent or by law. In practice this reduced the widening of the gap between rich and poor. This uneasy balance survived for more than a century. Today, however, this situation has changed dramatically. A pauperised ‘precariat’ is emerging and its numbers are growing dramatically. A society with a precariat is not just an economic problem; it is also socially unsustainable.


As noted earlier, a Social Contract is built on solidarity between citizens. This includes solidarity between citizens living in different parts of the country. Balanced urban/rural and regional development is essential if a Social Contract is to be accepted and to persist over time. However, in Ireland, people living in rural communities have never had the same level of services as people living in urban areas, and the gap in services and infrastructure between urban and rural Ireland has been growing steadily. Poverty rates are consistently higher in rural areas, compared to urban, while there has been an increasing deficit of employment in rural and regional Ireland. A new Social Contract should ensure a balancing of the benefits and resources of society across all regions.

The new Social Contract must correct the growing disparity in the standard of living in rural Ireland versus that in urban areas. It must also re-balance Ireland’s current development path. The proportion of the population living in and around the capital city is already very high by international standards, and this is continuing to grow; Dublin already accounts for half of economic output in Ireland (National Planning Framework, 2017). Yet we are continuing to model our growth path, and design our public services, in a way that encourages, rather than discourages, such concentration. By continuing to locate a disproportionate amount of our best health, education, and cultural institutions in the greater Dublin area, we are driving a model of development that precludes the kind of regional balance required for Ireland to thrive.

The absence of effective broadband in rural areas has major negative economic and social impacts, skewing the distribution of economic gains towards large urban areas. As part of the necessary programme of investment referred to earlier, a proper broadband network in the country must be delivered.

The boom years saw an attempt to redress growing regional imbalances in socio-economic development through a National Spatial Strategy (2002-2020). This failed, partly because of Government’s own initiatives such as the decentralisation programme for public servants which undermined the Strategy (Meredith and van Egeraat, 2013). We believe that policy must ensure balanced regional development through the provision of public services and through capital spending projects. Ireland 2040, our new National Planning Framework, has created a forum for deliberative national

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debate where a new National Spatial Strategy can be formulated. This has the potential to re-balance Ireland’s development strategy but greatly depends on whether the shaping of this strategy genuinely takes on board the views of all stakeholders. The framework should provide a roadmap to a society in which human rights are guaranteed, human dignity is respected, human development is facilitated and the environment is protected; to the society we are describing in this chapter. Capital investment, infrastructure development, and service provision must all be aligned with this direction if it is to succeed.

A key part of the Social Contract is solidarity between generations. At different points in the lifecycle, all of us will be either net beneficiaries from, or net contributors to, society (Hills, 2015). This differs, depending on whether we are children, adults of working age, or pensioners. It depends on whether we are in full-time education, engaged in caring work, in paid employment, or volunteering in the community. But at all times, we are contributing to and benefiting from society in different ways.

With this in mind, Ireland needs a long-range plan to address demographic trends, and support our young but gradually ageing population. There must be an intergenerational commitment which ensures that children, people of working age and older people recognise their interdependence and are in a position to vindicate the seven rights set out above. The Social Contract is not just about generations alive today. It must also apply to future generations who will inherit the world that is emerging under our stewardship. Care for the environment is a key aspect of this. The rights of future generations must be respected in present-day decision-making if we are to have a sustainable society in the future.

Another key part of the Social Contract is solidarity with other peoples. At a time of large-scale migration, Ireland should remember not just our duty to our fellow humans, but the long-term economic benefits of inward migration. Broadly speaking, immigrants are net contributors to European economies when allowed to work, and are on average better educated than the general population (OECD, 2014). They also tend to be more concentrated in the younger and economically active age groups and thus reduce dependency ratios, particularly in Western European countries with ageing populations (Gagnon, 2014). As noted already, the long-term


sustainability of a relevant social contract is dependent, in part, on a well-educated economically active workforce.

Immigration also results in a more diverse workforce, which has a positive effect on productivity as workers are exposed to the ideas and knowledge of others, increasing the diffusion of ideas and making new innovations more likely. For this reason, efforts to better integrate immigrants should be seen as an investment, rather than a cost. Such facts often are not acknowledged in the public discourse on the matter. Diversity should be a strength that allows societies to flourish. A positive approach to the current refugee crisis will actually have long-term benefits for Ireland economically and socially, while allowing us to discharge our social responsibilities to other people.

Sustainability

A progressive and economically sustainable Social Contract would rest, in part, on the principle that benefits derived from things like technological development, economic growth, and societal advancement are shared. But, to a great extent, the opposite has happened, and the political repercussions are to be seen in many Western democracies. There is a point when people conclude that their society is unfair, that the voice of ordinary people is not heard, that the new resources becoming available are not fairly distributed, and that the benefits are accruing to those already better off.

Ireland had a vibrant economy in the years leading up the crash of 2007/2008, but it did not have a sustainable one. At the only time in the history of the state where full employment was achieved, it turned out that the foundations on which it was built were wholly unsustainable. The need for a broad and sustainable revenue base has already been addressed. But in order to enhance economic and financial sustainability, the new Social Contract should reconceptualise the interaction of employment and work, taxation, and welfare.

The economy of the future needs to recognise people’s right to meaningful work and must operationalise this right even when sufficient jobs are not

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available for all those seeking employment. A Basic Income9 system would go some distance towards addressing the new world of work and should, therefore, be part of a new Social Contract for the 21st century. It would be particularly apt, given the aforementioned technological progress – which will see many skills and jobs become obsolete – as well as changing demographics and the need for a fairer distribution of economic resources. A move towards such a system might include initiatives like making tax credits refundable, making low-paid work more rewarding whilst helping to further integrate welfare system, taxation, and the labour market. As part of the social contract, how our society organises income, work and participation should be a key focus for policymakers over the coming years.

As noted earlier, the Social Contract is not just about generations alive today. It must also apply to future generations who will inherit the world that is emerging under our stewardship. Taking steps to ensure environmental sustainability is a key aspect of securing the world for future generations. The rights of future generations must be respected in present-day decision-making if we are to have a sustainable society in the future.

Sustainable development is development which meets the needs of the present while not compromising the needs of the future. Climate change remains the greatest long-term challenge facing Ireland today. With this in mind, the challenge of reducing Ireland’s fossil fuel emissions should not be postponed in deference to the goal of economic growth. As part of a new Social Contract, Ireland should adopt ambitious statutory targets limiting fossil fuel emissions, and introduce taxation measures necessary to compensate for the full costs of resource extraction and pollution. The failure to tackle climate change now will have significant impacts into the future, including on food production, regional and global ecosystems, and on flood-prone regions.

Unfortunately, Ireland does not have a good record as an international leader. For example, according to a report by the Sustainable Energy Authority of Ireland (2016), if Ireland were to reach its 2020 renewable energy and emissions reduction targets it would avoid the associated compliance costs; between €65m and €130m per percentage shortfall on the

9 For further information on how a system of Basic Income could be implemented, see Costing a Basic Income for Ireland (Murphy & Ward, 2016) at https://www.socialjustice.ie/sites/default/files/attach/policy-issue-article/4642/chapter9.pdf


overall binding target. However, if the Environmental Protection Agency’s current projections are met, Ireland’s fines could amount to around €1bn.

The issue of well-being is central to the social sustainability of a society and consequently should be part of a new Social Contract. Well-being is about human flourishing. Helen Johnston summarises this well when she states

“…a person’s well-being relates to their physical, social and mental state. It requires that basic needs are met, that people have a sense of purpose, that they feel able to achieve important goals, to participate in society and to live the lives they value and have reason to value.

People’s well-being is enhanced by conditions that include financial and personal security, meaningful and rewarding work, supportive personal relationships, strong and inclusive communities, good health, a healthy and attractive environment, and values of democracy and social justice. Public policy’s role is to bring about these conditions by placing the individual at the centre of policy development and delivery, by assessing the risks facing him/her, and ensuring the supports are available to address those risks at key stages in his/her life.”

(Johnston, 2009: 133-4)

To ensure that society is viable into the future there are six core domains that must be secured:

• Environment and Sustainability including the local built and natural environment, natural resources, ecological footprint, waste management, pollution, energy, biodiversity, wildlife, relevant education etc.

• Social and Community Development including access to services and infrastructure, social inclusion, community cohesion, community facilities and resources, volunteering, community development and relevant education

• Economy and Resources including enterprise, employment, unemployment, prosperity, poverty, living standards, infrastructure.

• Health including mental health, physical health, access to appropriate services, care services, disability, health promotion etc.

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• Values, Culture and Meaning including arts, sport, spirituality, equality, resilience, and inclusion, accompanied by a long term vision.

• Participation, Democracy and Good Governance including involvement, belonging, participation in community, volunteering, local identity and pride, participation in decision making, voting, transparency ,and accountability of local structures.

These clearly include many aspects of the Social Contract we have already outlined in this paper. However, they all are required if we’re to ensure people’s well-being and to secure social sustainability as part of that Contract.

New indictors and indexes are required to track development comprehensively and effectively. Financial and economic, environmental, and social sustainability are all key objectives and are all interlinked. To reflect this, Ireland needs new indicators measuring both well-being and sustainability in society, to be used alongside measures of national income.

Creating a sustainable Ireland requires the adoption of new indicators to measure progress. GDP and GNP are limited to measuring the monetary value of gross output, income, and expenditure in an economy, and includes many activities that are in fact detrimental to society and incompatible with the common good. The Report by the Commission on the Measurement of Economic Performance and Social Progress (Stiglitz, Sen & Fitoussi, 2009), led by Nobel Prize winning economists Amartya Sen and Joseph Stiglitz, argued that new indicators measuring environmental sustainability, financial sustainability, well-being, and happiness are required, and we are fully supportive of such a conclusion.

Social Justice Ireland recently published a Sustainable Progress Index 2017 (Clark and Kavanagh, 2017) based on the Sustainable Development Goals (United Nations, 2015). This Index moves beyond national income as a measure of societal advancement, encompassing environmental and social indicators of progress as well as economic ones. The index looks at economic, social and environmental development, comparing Ireland’s present performance with the past, as well as with other countries in the EU-15 at present, and ranks the 15 countries on each of the three dimensions, as well as overall. This index will be published annually.


The use of such an index by Government would ensure that issues such as climate justice and balanced regional development, among other key indicators of well-being, are given the priority they deserve by policymakers. Well designed and comprehensive indicators will help Government and society measure our progress in achieving the goals of the new Social Contract

Conclusion

Ireland has changed considerably in the last 30 years. We find ourselves in the middle of a global shift of ideas, values and politics. With a generational shift in politics clearly taking place in Ireland, the question of what values will emerge as dominant in this country over the coming years is of crucial importance. With the rise of populism around the world Ireland needs to prove itself a leader in responsible and informed democratic participation. We should do this as an example to other countries, but also to ensure that the political trends being experienced globally do not begin to occur at home. Finally, we must do so because democratic participation is a right of our citizens; this is necessary for the creation a Real Republic.

We need clarity about what kind of Ireland we want to shape. We also need clarity on the role of the Citizen and the shape of a new Social Contract. Our proposed new Social Contract is based on a vision for Irish society that incorporates fairness and equality with respect for human rights and the protection of human dignity. It envisages an Ireland where Government works in the interest of all; where social cohesion and the common good are the primary measures of progress, and the economy is nurtured for the benefit of society; a society where economic growth is not a goal in itself, but a means to social development and well-being.

The leaders of the rebellion just over a century ago, which eventually led to the establishment of the Republic of Ireland, proclaimed in their founding document guarantees of religious and civil liberty, equal rights, and equal opportunity for all citizens, and declared their resolve “to pursue the happiness and prosperity of the whole nation and of all its parts”. We believe we have illustrated a vision of such a society; a society in which most Irish people aspire to live. Today, our political leaders talk about a “Republic of Opportunity”. This must be made a reality. It is time for them to show the leadership required, engaging with civil society and all stakeholders in order to move Ireland in the direction of becoming a Real Republic.

24 Society Matters

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